Midterms Have Multiple Ties to Auto Industry

First Up 11/07/18

Midterms Have Multiple Ties to Auto Industry
For the first time since 2010, Democrats will control the U.S. House of Representatives after Tuesday's midterm elections, reports Automotive News. Republicans retained their majority in the Senate. A number of the elections have implications for the auto industry. In Florida, Democratic Sen. Bill Nelson – the ranking member of the Commerce Committee and a frequent critic of NHTSA over the pace of the Takata airbag recalls – fell narrowly behind Rick Scott, the state's outgoing governor. In Ohio, Richard Cordray, the controversial former head of the U.S. Consumer Financial Protection Bureau under former President Barack Obama, fell short in his bid to become governor. Meanwhile, congressmen with auto dealership backgrounds won their races, including Republican Rep. Vern Buchanan in Florida; Democrat Rep. Don Beyer in Virginia; Republican Rep. Mike Kelly in Pennsylvania; and Republican Rep. Roger Williams in Texas. However, Ohio Rep. Jim Renacci, a former dealer, lost his Senate bid to Democrat Sherrod Brown. Read more here.  

VW Takes Another Shot at Compact Pickup Market
Volkswagen AG plans a renewed push into the lucrative pickup segment that’s eluded the German manufacturer for years, reports The Detroit News. The compact Tarok, shown Tuesday in Sao Paulo, “will soon” be offered in Brazil, the company said in a statement. The truck “has the potential to boost Volkswagen’s model range in other global markets,” it said without providing details. The world’s biggest carmaker has struggled to break through in the pickup category while rivals from General Motors Co. to Toyota Motor Corp. have raked in profits. VW has made progress in sport utility vehicles, another area where it lagged behind, but its truck lineup has been restricted to the low-volume Amarok, introduced in 2010. The vehicle, which is mainly sold in South America and Europe, is smaller than Ford Motor Co.’s best-selling F-150. VW’s ambitions could get a boost from broad collaboration talks with Ford that range from commercial vehicles to autonomous driving, electric cars and potentially more. Read more here.

Toyota Earnings Soar on Global Sales Surge
Toyota Motor Corp. reported a 28 percent increase in its net profit for the July-September quarter, earnings buoyed by strong demand in key global markets, including the Americas, Asia, and Europe. According to The Detroit Bureau, the Japanese giant also advised that it expects to see earnings push past earlier forecasts for the full year, in part driven by unexpectedly strong demand in China. Sales of the Lexus brand, have been booming there, despite a slowdown in the overall Chinese market. Sales gains were only one of the factors that propped up Toyota’s bottom line, said Senior Managing Masayoshi Shirayanagi. Referring to aggressive cost-cutting efforts, he said, “We are steadily making progress toward achieving our challenge-level target.” For the second quarter of its fiscal year, Toyota net reported a profit of 585.1 billion yen, or $5.2 billion. That was up from 458.3 billion a year ago. Its operating profit was 579.1 billion yen, or $5.11 billion, up from 522.2 billion during the second fiscal quarter last year. But that was slightly below the 584.89 billion yen consensus forecast. Read more here. 

The Gas Engine Still Has a Long Life to Live, Aston Martin CEO Says
The reported death of the internal combustion engine (ICE) has been greatly exaggerated, Aston Martin's CEO told CNBC Wednesday. The British manufacturer of sports cars has made concessions to the trend towards all-electric vehicles with its RapidE, due for sale in 2019. The firm's ultra-luxury brand, Lagonda, will also have an electric drive train and is due in 2021. CEO Andy Palmer told CNBC in an exclusive interview on Wednesday that car makers still had an awful lot of time to develop and sell traditional ICE engines. "I don't think the ICE will die any time soon," before adding, "Electric vehicles are good in some circumstances, but the internal combustion engine and, in particular, the gasoline engine still has a lot of life left in it. After years of losses, and several bankruptcies, the British manufacturer of luxury sports cars made a 2017 full-year pre-tax profit of £87 million ($114 million). Read more here.  

AutoNation Won't Build More Pre-Owned Stores in 2019
AutoNation doesn’t plan on building any new AutoNation USA pre-owned stores in 2019, and will instead focus on the Customer Care piece of its brand extension strategy, reports Auto Remarketing. “We are encouraged by current progress and are continuing to evaluate the existing stores,” chief operating officer Lance Iserman said during opening remarks of the dealer group’s latest quarterly earnings call. “The investment in AutoNation USA stores adversely impacted third-quarter of 2018 by less than two cents.” Discussing the retailer’s overall bucket of brand extension program, of which AutoNation USA is a part, chief executive officer Mike Jackson said: “During the quarter, we were looking very closely as to where we invest time management and capital more aggressively — and you can’t do everything at the same time — and where then could we take a bit more patient view.” Read more here.  

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